Departing Swisscom boss "lost credibility"

Alder (right) shares a joke with Rauh (centre) and Schloter (left) Keystone

Former Swisscom chief executive Jens Alder, who stepped down on Friday, had lost credibility with partners, chairman Markus Rauh tells swissinfo.

This content was published on January 20, 2006 - 15:31

Alder resigned after the Swiss government, Swisscom's major shareholder, rejected his strategy of expanding business overseas by taking over foreign telecommunications firms.

Alder told a news conference that he is leaving to let someone new [incoming CEO Carsten Schloter] develop new government-imposed strategies.

Bank Vontobel telecoms analyst Panagiotis Spiliopoulos believes Alder could not face implementing the new strategy that placed a ban on acquiring foreign fixed-line operators.

"This is something that wasn't enough for Mr Alder, who had the vision to build a pan-European telecoms player," Spiliopoulos told swissinfo.

But according to Rauh, Swisscom has put its troubles with the government behind it and will try to grow organically in Europe.

swissinfo: Why was Jens Alder's position untenable?

Markus Rauh: The majority shareholder [the Swiss government] changed the general strategic direction and Alder lost his credibility, especially towards the financial markets and as a partner in negotiations and discussions with third parties.

We were in deep negotiations [regarding possible takeovers of foreign companies] and then we had to withdraw and say everything we said is now invalid.

This makes you lose your credibility. The manager at the top who has lost this credibility has a big problem.

swissinfo: Has there been too much political interference in Swisscom affairs?

M.R.: There has been zero political interference over the past eight years apart from one incident on November 25 [when the Swiss government blocked Swisscom acquisitions of foreign fixed-line operators].

We have straightened that out now and we have a solid cooperation basis without political influence.

Our relationship with the government is repaired and back on track as it was before November 25. We have had very constructive meetings and the past is behind us.

swissinfo: Can the new CEO, Carsten Schloter, be more persuasive with the majority shareholder?

M.R.: We don't have a problem with the majority shareholder so we don't need to convince them of anything. They let us do what is right and we have direction with strategic goals.

Mr Schloter is a good communicator, a very sharp analyst and an implementer. These are all the characteristics that Mr Alder had.

swissinfo: Where does Swisscom go from here?

M.R.: We are going to continue to be the dominant telecoms operator. We are going to extend our business in Switzerland and make organic growth in Europe.

We have plenty of money to do what we need to do. We will see what we can do with the restriction of no incumbents [ban on buying foreign fixed-line operators]. This will change the risk profile and the skill profile in order to be successful.

swissinfo: How will you repair Swisscom's battered image?

M.R.: We have already taken the first steps by saying that we are on the safe side, that we are very positive and that we are convinced that there are many opportunities we can take.

swissinfo: Have you lost ground against your competitors?

M.R.: At the moment we don't see any loss. It is a tough battle, but we will fight it.

swissinfo-interview: Matthew Allen in Zurich

Key facts

Jens Alder joined Swisscom in 1998 and was appointed CEO in December 1999.
He stepped down on Friday and will be replaced with immediate effect by Carsten Schloter, currently CEO of Swisscom Mobile.
Alder will receive a payoff of SFr1.54 million ($1.2 million), comprising a year's salary and bonus.
The Swiss government announced on November 23 that it intends to sell its majority share in Swisscom. The following day it banned Swisscom from buying foreign companies, pulling the rug out from under a proposed takeover of Ireland's Eircom.

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In brief

At the end of 2004, Swisscom had a 61% share of the market. It was followed by sunrise (21.3%) and Orange (17.7%).

The state currently holds 66% of Swisscom, representing a market value of SFr17 billion.

There are almost 64,000 other shareholders, the vast majority in Switzerland. Of these, 12 shareholders hold more than 100,000 shares.

The German government owns 37% of Deutsche Telekom. The French government owns 33% of France Telecom.

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